No.

8, October 20, 2023

Beijing Launches Serious

Cross-border Arrests in Myanmar
SAC Chairman Not Invited to BRI High-level Forum

Transferring 337 Chinese nationals arrested by Kokang Authorities to

Lincang Public Security Bureau on 7 October (Photo: China Daily)

This explainer focuses on developments in the Myanmar-China

relationship over the past few months. Dissatisfied with the State
Administration Council’s (SAC) efforts on crackdown of cross-border
crimes, Beijing has undertaken its own initiatives towards arresting
suspects in the Kokang and Wa areas. Meanwhile, Snr. Gen. Min Aung
Hlaing failed to receive invitation to either the 10th anniversary of the
Belt and Road Initiative (BRI) or the third BRI forum. Instead SAC
member Lt. Gen. Mya Tun Oo though was in attendance. Discussions
were also held between the SAC and the Chinese government to restart
long overdue projects in the China-Myanmar Economic Corridor (CMEC).
The SAC has also reached out to China, seeking assistance in the fields
of biometrics collection system for census data collection and sharing
of nuclear technologies. This explainer will highlight and explore these
and other notable cases.
 No. 8, October 20, 2023

Dominant Issues in China-Myanmar Relations

An analysis of ISP-Myanmar’s timeline on China-Myanmar relations in

September 2023 reveals a total of fifty-seven significant issues
documented (see table below), with the dominant subjects being
political economy, geopolitics, diplomacy, and transnational crime. Of all
the significant issues in September, with some subsequent significant
developments in October, ISP-Myanmar will, in this explainer, showcase a
concise overview of five pivotal issues.

n Summary of major issues tracked in China-Myanmar relations

(September 2023)

No Issue Number of issue

1 Geopolitics 11

2 Political Economy 15

3 Diplomacy 9

4 Defense and Security 2

5 Conflict and Peace 2

6 Soft Power 4

7 Administration, Policy, and Standardization 3

8 Social and Human Rights 2

9 Transnational Crime 9

Total 57

This Explainer is published on October 24, 2023, as a translation of the original Burmese language version that
ISP-Myanmar sent out to the ISP Gabyin members on October 20, 2023.

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 No. 8, October 20, 2023

1. Beijing Launches Serious Cross-border Arrests in Myanmar

Beijing has begun undertaking its own initiatives towards arresting

Myanmar nationals and others including Chinese who are suspected
of conducting online fraud businesses in China-Myanmar border
regions. Eleven businessmen from Kokang were arrested by Chinese
police forces on October 1st while they were in Zhenkang county, Lincang
for the “China-Myanmar ‘A-shu-se’ Folk Song Festival and Friendship
Games” (镇康县2023年中缅“阿数瑟”山歌会暨友谊运动会). Among the
arrests was the famous billionaire U Maung Maung a.k.a Liu Zhengxiang,
the director of Fully Light Group based in Laukkaing. In cooperation with
Kokang Border Guard Forces, he has been running casinos, hotels and
jewelry businesses. The company has maintained close relationships
with previous Myanmar governments as well as with the current SAC
administration. Since the coup, the company has been permitted to make
several appearances at the China-Myanmar Trade fairs as well as having
signed memoranda of understandings (MoU) with various Chinese
companies. Based on reports from Chinese Public Security police to the
SAC’s Consulate Office in Kunming, several Kokang businessmen have
been detained as they are “suspected of violating China’s laws.” Quoting a
cross-border exporter, some Myanmar news sources reported that these
suspects are sent to Chinese interrogation centers in Beijing.

Similarly, on October 12, the Ministry of Public Security in China issued an

arrest warrant for two individuals linked to the Chairman of the United Wa
State Party (UWSP) on similar reason of online fraud links with rewards.
Upon the arrests of Wa leaders, later the UWSP officially declared their
dismissal from the party. SAC newspapers also reported issuing warrants
from Hopang district court on October 19.

The State Administration Council's inability to effectively address

cybercriminal activities led to dissatisfaction on the part of the Beijing
government, prompting them to take matters into their own hands by
launching the cross-border arrests directly. The State Administration
Council has not made any claim on China’s action. However, during the

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 No. 8, October 20, 2023

n Fully Light Group

Fully Light Group was founded in 1992 and is located in Ward No. 1 (Dongcheng) in
Laukkaing. Fully Light currently employs over 10,000 workers across more than 36
businesses such as travel and tourism, hotels, real estate, manufacturing, and
the entertainment sector. Notable ventures within this conglomerate include the
renowned Kokang New World Project in Laukkaing, with an investment exceeding
$205 million, and the Ye Dagun Taung Urban Planning project in Mandalay, which
commands over $720 million in investments. Additionally, the Eastern Complex in
Myawaddy city and Gobo East Casino in Sihanoukville, Cambodia are poised to
draw millions in investment. Fully Light Group operates throughout Myanmar,
maintaining numerous subsidiaries across 14 cities in the country. Beyond its
domestic reach, the company also extends its presence with branch offices in
Cambodia and China. Chairman U Liu Zhengxiang has garnered remarkable state
honor for contribution to Buddhism, and the Green Transportation Award from
former Cambodian Prime Minister Mr. Hun Sen.

59th Police Force Day Ceremony, SAC Vice Chairman, Deputy Snr. Gen. Soe
Win announced that the 2023 three nation operation between China-
Thai-Myanmar had taken action against 119 online scams and 58 online
gambling cases. However, no actions have been taken in the Mongla,
Tachileik or Myawaddy areas. As a result of the crackdown on illicit
businesses along the China-Myanmar border, concerns have arisen that
these enterprises may be forcibly relocated to the Thai-Myanmar border.
The unilateral action of China shows unequal power in diplomacy and
its own way of 'frontier management'.

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 China Studies
ISP Mapping No. 20, October 20, 2023

n Fully Light Group’s Economic Empire

The following analysis focuses on the economic empire of U Maung Maung (Liu Zhengxiang), one of the
eleven businessmen arrested by the Chinese government in Kokang. Fully Light Group, headquartered in
Kokang, has maintained a strong relationship with every Myanmar government since 1992 and has significantly
expanded its business operations throughout the country. Furthermore, their expansion has reached into
Yunnan’s Lincang in China and Sihanoukville in Cambodia.
N
1. Fully Light Gas Stations 11. High End Science and Technology
2. Dongcheng Power Plants Zone
3. East Lake Resort 12. Lakeside Mansion
Shwe Taung Fertilizer Trading
4. High End Real Estate 13. High Land Communications
5. Fully Light Travel and Tour 14. Golden Triangle Cigarettes
6. Kokang New World Project 15. Fully Light Dried Tea Leaves
Ayeyarwaddy Partners Trading Co. Ltd. (Joint Venture) 7. Golden Triangle Media Production
8. Fully Light International Hotel 16. Fully Light Purified Water Factory
9. Fully Light Carry Gate 17. Fully Light Concrete Factory
India 10. Kokang New World Trading Zone 18. Shwe Ta Zin and Yuipa Brands Fully
Myitkyina

Light Pesticide Factory

China
Fully Light Hotel
Bangladesh

Shwe Shian Gems

Sein Lei Wai (Silver Dragon) Coal Mining Sugar Factory

Muse
Lincang
Zhenkang
Laukkaing Nanhua Sugar Factory
Mengding
Lashio Chinshwehaw

1. Chinshwehaw Inland Port

2. Haoguang Hotel
Bagan Hotel

Mandalay 1. KAI Microfinance

2. Fully Light Hotel
3. Fully Light Rubber Plantation
4. Fully Light Sugarcane Plantation
1. TP Corn Field
2. Inle Lake Hotel
LNG Gas and Deep-Sea Port
Taunggyi
Laos

Naypyidaw
Yaw Mhwe Rice Plantation

Kyaukphyu

1. Ye Dagun Taung City and Golf Course

Bay of Bengal Project

2. Ayeyarwaddy Partners Trading Co., Ltd
3. Fully Light Agricultural Chemical and
1. Ayeyarwaddy Partners Trading Co.,Ltd. Fertilizer Trading (Joint Venture)
Fully Light Rubber Plantation
(Joint Venture) 4. Seasonal Crop Farming
2. Eastern Myanmar Hotel
3. Shwe Taung Fertilizer Trading Myawaddy
Yangon

Mawlamyine

Eastern Complex

Thailand

1. Fully Light Rubber Plantation

2. Fully Light Rubber Factory

Cambodia

1. Gobo East Entertainment

2. Best Day Travel and Tour

Pyae Sone Htet Myint Company

Note: The map is developed with the data available from the company's
Sihanoukville
published information, and the actual figures may be higher.

Kawthoung
 October 20, 2023

n The Apprehension and Transfer of Individuals Engaged in Online Scam

Activities
2023

August
24 Chinese nationals were transferred to Yunnan
26 Provincial Public Security Department

September
269 Chinese nationals were transferred to
Xishuangbanna Public Security Bureau 3

September
186 Chinese nationals were transferred to Yunnan
3 Provincial Public Security Department

1,207 Chinese nationals were arrested by Wa State Police September

Force and transferred to China’s Police Force

6

September
109 Chinese nationals were transferred to Lincang Public
25 Security Bureau

October
209 Chinese nationals were transferred to Puer Public
Security Bureau 1

October 337 Chinese nationals were arrested by Kokang

7 Authorities and transferred to Lincang Public Security

Bureau

October
2,349 Chinese nationals were transferred to Yunnan
Provincial Public Security Department 16

Note : ISP-Myanmar recorded the arrest and transfer of at least 4,690 individuals to China for their involvement in
illegal activities from August 26, 2023, to October 16, 2023.
 No. 8, October 20, 2023

2. SAC Chairman Not Invited to BRI High-level Forum

President Xi Jinping’s Belt and Road Forum for International Cooperation

marking the initiative’s 10th anniversary took place in Beijing over two
consecutive days, October 17 and 18. It was attended by top leaders from
130 countries including Russian President Mr. Putin. However, Snr. Gen.
Min Aung Hlaing failed to receive invitation. Though SAC Deputy Prime
Minister Lt. Gen. Mya Tun Oo did attend on Min Aung Hlaing’s behalf. This
was Lt. Gen. Mya Tun Oo second official trip to China, following his first on
September 24.

During the forum, contracts worth a total of $97.2 billion USD were signed,
with a commitment to focus on ‘small and beautiful’ projects in the coming
decade to prevent the accumulation of excessive debt. The Belt and Road
Initiative (BRI) was initially launched in 2013 by President Xi Jinping. As of
June 2023, the total value of contracts related to the BRI stands at a
staggering $2 trillion USD, with participation from 150 countries and 30
international organizations. China Myanmar Economic Corridor (CMEC)
was initiated as a part of BRI in 2018 but ISP-Myanmar has not recorded
any completed projects stemming from it (ISP-Myanmar will soon
publish an issue on the 10th anniversary of the BRI).

Throughout September, multiple discussions have been held between

the Chinese government and top SAC leaders to resurrect the stagnating
CMEC. To improve bilateral transport sector ties between two countries,
Lt. Gen. Mya Tun Oo held discussions with China’s Deputy Prime Minister
Mr. He Lifeng and Minister of Transportation Mr. Li Xiaopeng on his first
Beijing trip on September 24. Lt. Gen. Mya Tun Oo, the newly assigned
chief of the Myanmar Investment Commission, discussed the potential of
the Kyaukpyu-Mandalay and Mandalay-Muse railway projects at the
China Railway Group head office. In Beijing he also held discussions with
the CEOs of China Communication Construction Company (CCCC),
responsible for the Yangon Urban Development project, and China
Harbour Engineering, responsible for bridge projects. On September 16,
SAC’s Minister of Construction, U Myo Thant, explained to China’s Housing

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 No. 8, October 20, 2023

and Urban-Rural Development Minister, Mr Ni Hong, that CMEC projects

are planned to adhere to the principles of ‘high-quality development.’ Also
on September 8, a memorandum of understanding (MoU) was signed
between the SAC’s Ministry of Construction and China-based company
China Harbour Engineering to implement the Wa Ta Lone Tunnel project.
The project is slated to become one of the CMEC ‘early harvest’ projects
fully implemented under CMEC and was included in the 33 contracts
signed between the National League for Democracy (NLD) and President
Xi Jinping, during Mr. Xi’s trip to Myanmar in January 2020. This important
project, located on the Taunggyi-Loilem Road, connects the southern
and northern regions of Shan state. This potentially transformative
project though is only now again being discussed, three years after the
Covid-19 pandemic and subsequent coup in Myanmar.

3. SAC Requests Biometrics and Nuclear Technology Transfers

from China

The SAC is requesting help from Beijing regarding a system for

implementing its Electronic Identification Card (e-ID), one of the first
uses of which will be as the basis to hold elections after first collecting
national census data. SAC Minister of Immigration and Population, U Myint
Kyaing made the request for assistance to China’s Vice Minister of Public
Security and Commissioner of National Immigration Administration (NIA),
Mr. Xu Ganlu.

In October, the SAC has taken the first steps towards conducting a
national census in 2024 through which to introduce the e-ID system. U
Myint Kyaing met with Hisign Technology Company, on September 18 to
learn about Biographic and Biometric technologies. Hisign Technology is
a Beijing-based firm that also assists the Chinese government with its
e-ID system. U Myint Kyaing also visited Beijing Daxing International
Airport to learn about technology-based passport checks, the collection

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 No. 8, October 20, 2023

n Hisign Technology/ Haixin Kejin Company

Hisign Technology, also known as Haixin Kejin Company, was established in 1998,
with its headquarters located in Beijing, China. The company specializes in
providing advanced intelligence technology to the Ministry of Public Security of
China and offering mass surveillance systems to state police agencies. Their
services encompass collecting DNA data from various provinces in China,
providing electronic identification cards (e-ID) and electronic passports
(e-Passport), distributing fingerprint scanning and facial recognition tracking
devices, as well as drug detection equipment.

of personal data from all travelers, and technology-based examinations

for e-Passport holders. While the SAC has stated its intention to employ
this technology for the national census, it is crucial to be aware that
China's latest biometric technology advances have the potential to be
applied in various other ways.

In addition to biometric technologies, SAC also wants to adopt China’s

civil nuclear technology. On September 16 at the second China-ASEAN
Forum for Peaceful Uses of Nuclear Technology, SAC ambassador to
China, U Tin Maung Swe, requested the Chinese government to train
professionals to implement nuclear technology in Myanmar’s agriculture,
health, and energy sectors. On the same day, SAC Science and Technology
Deputy Minister Dr. Aung Zeya also met with China National Nuclear
Corporation’s Vice President and China Atomic Agency Authority’s Deputy
General Director. Meanwhile at the Annual World Security Forum (2023)
held from September 19 to 21, SAC Deputy Minister of Home Affairs Lt.
Gen. Ni Lin Aung, who also serves as Police Chief, emphasized the need to
establish control over the use of drones, which have become increasingly
used in attacks against Myanmar military.

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 No. 8, October 20, 2023

4. 8th Anniversary of NCA and China’s Role in Myanmar’s Road to

Peace

Mr. Deng Xijun attended the 8th anniversary of the Nationwide Ceasefire
Agreement (NCA) ceremony as a special envoy for China. In addition to
the special representative from China, other renvoy from countries such
as India and Thailand gave speeches given their positions as international
witnesses to the initial signing of the NCA.

Mr. Deng Xijun delivered a speech in which he expressed China's

perspective on the Nationwide Ceasefire Agreement, hailing it as a
significant milestone in Myanmar's peace process. He also expressed his
belief that the signatory parties would engage in "openness, inclusivity,
flexibility and practicality" during the discussions. In the aftermath of the
2021 coup in Myanmar, Japan and several Western countries have
refrained from engaging in matters related to the NCA. However, China
appears to support and engage with the agreement. It is noteworthy that
the Chinese government has expressed the view that "peacebuilding
must be prioritized for Myanmar's development," especially given their
earlier stance that armed conflicts would naturally diminish with economic
development.

Although Mr. Deng Xijun gave a speech on the 8th anniversary of the NCA,
the ceremony was not attended by the Kachin Independence Organization
(KIO) or other organizations with relatively close ties to China such as the
United Wa State Party (UWSP), Shan State Army (SSPP) and National
Democratic Alliance Army (NDAA), the three-brotherhood alliance of
Ta’ang National Liberation Army (TNLA), Arakan Army (AA) and Myanmar
National Democratic Alliance Army (MNDAA). At the same time, Northern-
based ethnic armed organizations remain isolated from the process since
having formed the Federal Political Negotiation and Consultative
Committee (FPNCC) in 2017 to pursue other solutions as they disapproved
of the NCA.

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 No. 8, October 20, 2023

Regarding Myanmar’s peace and border stability, Mr. Deng Xijun continues
to engage in discussions with the SAC but the Chinese government
peace fund has been frozen since the 2021 coup. Therefore, SAC Chairman
Snr. Gen. Min Aung Hlaing has requested the Chinese government not to
support “actions which endanger national disintegration” conducted by
ethnic armed organizations operating along the China-Myanmar border
and has urged China to encourage those organizations that have yet to
sign the NCA to do so.

5. Blockage at Muse Gate

There has been a crowd of Myanmar nationals queuing to cross the

China-Myanmar border with the use of one-week travel cards in order to
find jobs there. Widely known as a Green Card, the Temporary Border
Pass (TBP) began to be distributed from September 4, 2023, at Nantaw
and Sinphyu gates before arriving to Muse’s Mangwein gate. Residents
from dry zones such as Sagaing and Magway regions are the primary
applicants for these cards. Applicants though are often forced to wait in
line for two to three consecutive nights to receive permission to cross.

The authorities issue these cards for a nominal fee of 500 kyats, but those
in urgent need end up paying as much as 300,000 to 500,000 kyats. But
Myanmar nationals are engaging in illegal day labor, leading to arrests by
Chinese law enforcement. Since these cards are valid for only seven days
to stay, they are forced to reapply a new card from the Myanmar side to
cross border again.

At the border crossing, individuals in line undergo checks to verify if they

are subject to blacklists. Meanwhile, residents from Muse-Namhkam
often find themselves compelled to seek refuge near the Chinese border
due to ongoing clashes between the joint forces of Ta'ang National

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 No. 8, October 20, 2023

Liberation Army and others,and SAC forces. In addition to the Temporary

Border Pass (TBP) green color card, border residents are now eligible to
apply for a one-year border pass card (Red BP Book). A Business Visa
option has also been introduced, commencing on October 1, but is
currently restricted to business owners and does not extend to migrant
workers. To safeguard the interests of these migrant workers, there is an
urgent need to establish a system to administer this cross-border labor,
perhaps initially through a bilateral MoU.

Note – Footnotes and references list with corresponding dates can be viewed on the ISP-Myanmar website.

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 www.ISPMyanmar.com/community

Promoting Shared Reality, Appreciating Diversity, and Imagining Possibilities

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